An earlier Ponzi pain lingers
Many regrets for those lured by Bradford Bleidt
January 20, 2009
By Robert Weisman
Before there was Bernard Madoff, there was Bradford Bleidt. Bleidt worked his Ponzi scheme not at exclusive Florida country clubs but in red-brick Masonic halls north of Boston.
Four years after he was caught swindling 125 clients out of $32.6 million and sentenced to 11 years in prison, Bleidt's deception still stings in the North Shore lodges where he fleeced his victims.
Master Mason Ed Yaeger, 75, said he and his wife, Evelyn, 77, and their two daughters lost $450,000 to Bleidt. Like other clients who had trusted and invested their savings with the money manager, the Yaegers today live modestly, mainly on Social Security checks.
"Every time our kids give us something now, it's food coupons for the Market Bas ket," said Ed Yaeger, a Lynn resident, cancer survivor, and retired marketing manager for a Texaco distributor. "The way I look at it, I was born in the Depression, and now I'm back into it."
Walt Pohle, 75, a retired GTE Sylvania engineer who lives in Lynn, said he had set up accounts to help pay college tuition for his grandchildren but had to draw from those accounts himself after he lost his retirement savings to Bleidt. "I haven't been able to help my grandchildren out like I wanted to," Pohle said.
Mike Tenney, 57, who left his job as plant manager for Sunburst Foods on a disability, said he had to take a home equity loan on his Swampscott house to pay for his daughter's wedding.
Five victims, each of whose families lost more than $100,000 in the Ponzi scheme, sat in the downtown Masonic hall here on a bitterly cold morning and talked of their crimped fortunes and dashed retirement dreams as they struggle to regain their financial footing.
Bleidt was a member of the Masons, a fraternal and charitable organization, and belonged to its Golden Fleece Lodge in Lynn. He managed money not only for Golden Fleece members but also for members of other Masonic lodges and other social clubs, where he would woo clients at lectures and lodge suppers. He also managed the funds of the lodges and clubs themselves.
But rather than invest the funds, he used them to fuel a lavish lifestyle - buying Boston Celtics tickets and paying for his sons' private schools - and used money from new clients to pay earlier clients.
Many of the victims have since formed a close bond, looking after one another and meeting regularly at the Masonic hall for social activities. Last month, they sat together in US District Court in Boston when a federal jury ruled that Sovereign Bank, where Bleidt kept his business accounts, wasn't responsible for the losses of former investors.
Victims recovered a fraction of their investments but don't expect any more from Bleidt, who is sitting in a federal prison in New Jersey. Some were hoping the Sovereign trial could lead to a settlement that would allow them to recoup more losses. Plaintiffs in that case have filed a motion for a new trial, claiming the facts of the case didn't support the verdict.
The Bleidt victims seldom talk among themselves about what happened because the memories are painful. But when they read about the Madoff case, an alleged $50 billion Ponzi scheme revealed last month, it paradoxically made them feel better.
"You go from thinking you're a dummy because it happened to you, to seeing how it happened to all these rich people," Tenney said. "Even some of these big banks were cheated out of their money."
"There's a lot of dummies out there," said Evelyn Yaeger. "I can't talk to Eddie about the episode. He gets so upset he walks away."
The parallels between the Bleidt and Madoff cases are strong. Both men found their investors at social clubs, though Bleidt's were more middle-class settings. Both inspired confidence - Madoff through his standing as former Nasdaq stock exchange chairman, Bleidt with his southern accent and ownership of business radio station WBIX-AM. And both hurt not only clients but a web of charities their clients supported.
Bleidt joined the Masons back in the 1980s but at first came to meetings only occasionally. "Every so often I had to call him and say, 'Brad, you're a little behind on your dues,' " recalled Bob Spinney, 76, of Saugus, a former lodge secretary.
Ed Yaeger was there the day Bleidt knelt at a altar in the Lynn lodge, where he was sworn in as a Mason.
"This is where Brad Bleidt said he would not 'wrong, cheat, or defraud a lodge of master masons nor a brother of this degree,' " he recalled, reciting the final obligation from Bleidt's swearing-in ceremony in 1983 and then pointing to a row of chairs. "I sat right there and heard him. Then he cleaned this whole building out of money."
Bleidt didn't start marketing his money management services until the 1990s, when he began showing up at the Lynn hall - and at Masonic and Odd Fellows lodges in Salem, Ipswich, Peabody, and Gloucester - much more frequently.
Spinney eventually asked Bleidt to join the board of trustees for his Mount Carmel Masonic Lodge, based in the same Masonic Hall in Lynn where Bleidt was an associate member. "It was the worst mistake in my life," Spinney said. Soon the lodge turned over nearly $500,000 for Bleidt to invest.
"When we needed money, the check was there," Spinney said. "We had no reason to doubt he was doing good by us."
Bleidt gave lectures at various lodges around the North Shore, outlining his investment strategy and signing up clients for his Allocation Plus Management Co. His pitch was simple: He mimicked the styles of big-time Wall Street money managers.
"He spoke to a group of lodges right in this building," Ed Yaeger said. "He said, 'I walk behind the big elephants and I pick up their droppings.' That was why he was so successful, we thought. All he saw in us was dollar signs."
The jig was up in November 2004, when a Greek Orthodox church in Weston asked Bleidt to return $1.5 million it had invested and he didn't have the money. His Ponzi scheme quickly unraveled.
For his victims at the Masonic lodge in Lynn, and at other clubs around the North Shore, one of the toughest outcomes is their inability to give as much to charity as they had in the past. The Mount Carmel lodge recently wrote a $400 check to buy clothing for local children whose homes were destroyed in two apartment building fires. In the past, members said, they would likely have donated more.
Bleidt's impact has even been felt in the 129-year-old building in downtown Lynn that houses several Masonic lodges.
On the fourth floor is a room with peeling paint, a cracked ceiling, and water damage from a leaking roof. "Our next step was to repair the roof in 2005," said Tenney. "But we lost all our money."
Tenney, walking through the lodge dining hall, said he and a fellow Mason sanded and resurfaced the floor last summer. Years ago, the lodge hired outside contractors to do the job, he said. "Now we can't afford to do that," Tenney said.
Bleidt's victims said they've learned some hard lessons. "If you have money," said Evelyn Yaeger, "just put it under the mattress."
"Don't be greedy," added her husband. "If the bank is offering 3 percent interest, take the 3 percent."
Robert Weisman can be reached at [email protected]
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